Wednesday, May 16, 2012

Senior citizens continue to bear burden of student loans

The burden of paying for college is wreaking havoc on the finances of an unexpected demographic: senior citizens.

New research from the Federal Reserve Bank of New York shows that Americans 60 and older still owe about $36 billion in student loans, providing a rare window into the dynamics of student debt. More than 10 percent of those loans are delinquent. As a result, consumer advocates say, it is not uncommon for Social Security checks to be garnished or for debt collectors to harass borrowers in their 80s over student loans that are decades old.

The recent recession exacerbated this problem, making it harder for older Americans — or the youths they are supporting in school — to get good-paying jobs. And unlike other debts, student loans cannot be shed in bankruptcy. As a result, some older Americans have found that a college degree led not to a prosperous career but instead to a lifetime under the shadow of debt.

“A student loan can be a debt that’s kind of like a ball and chain that you can drag to the grave,” said William E. Brewer, president of the National Association of Consumer Bankruptcy Attorneys. “You can unhook it when they lay you in the coffin.”